SaaS Quick Ratio Engine
Weigh new and expansion MRR against churn and contraction.
3.13× is healthy, but churn and contraction are eating a meaningful share of new MRR. Tightening retention would compound your growth quickly.
Quick ratio ≥ 4 is the durable-growth benchmark. Below 1, you're shrinking despite new sales, the classic sign to stop pouring in leads and fix churn.
About this calculator
Net new MRR can look healthy while masking a business that's adding and losing revenue at nearly the same pace, a leaky bucket that needs constant refilling. The SaaS quick ratio strips that ambiguity out by weighing everything you gained (new and expansion MRR) against everything you lost (contraction and churned MRR) in a single ratio, giving a faster read on whether growth is durable or fragile.
How to use it
- Enter new MRR and expansion MRR for the period, the two ways you gained recurring revenue.
- Enter contraction MRR and churned MRR, the two ways you lost it.
- Read the quick ratio, gained MRR divided by lost MRR, alongside net new MRR and a durability rating.
Methodology
Gained MRR is new MRR plus expansion MRR; lost MRR is contraction MRR plus churned MRR. The quick ratio is gained divided by lost, if lost MRR is zero the ratio is treated as infinite, since there's no loss to offset the gain.
Net new MRR is simply gained minus lost, the same net figure used in an MRR bridge, but the quick ratio expresses it as a multiple rather than a dollar amount, which makes it comparable across companies of very different sizes.
The tool grades the ratio into four bands: 4x or above is excellent, 2x to under 4x is healthy, 1x to under 2x is fragile (still growing but with a meaningful share of new MRR immediately offset by losses), and below 1x means the business is shrinking, churn and contraction outpace everything you're adding, regardless of how much new business you close.
A quick ratio can look strong purely because "lost MRR" is a small denominator even if churn is a real problem, always check net new MRR and the absolute churn dollar figure alongside the ratio, not the ratio in isolation.
FAQ
This tool treats 4x and above as excellent, and most operators consider 4x the benchmark for durable, retention-driven growth. A ratio between 2x and 4x is workable, but below 2x means churn and contraction are consuming a large share of what you're adding.
NRR looks only at existing customers, expansion and churn among the base you already have, and excludes new business entirely. The quick ratio includes new MRR in the numerator, so it answers a different question: is total growth (new plus expansion) outpacing total loss (contraction plus churn), not just how the existing base alone is trending.
Yes, if new MRR dominates the numerator while churn is quietly high in dollar terms, the ratio can still look strong because new sales are masking the leak. Always look at the underlying churned MRR dollar figure and NRR alongside the quick ratio, not the ratio alone.
Contraction is revenue lost from customers who stayed but downgraded, fewer seats, a lower tier, a removed add-on. Churned MRR is revenue lost from customers who canceled entirely. Both count as losses in this calculator's denominator, since both represent MRR you no longer collect.